The Co-operative Group’s new CEO Euan Sutherland has insisted the society will not be making any more disposals to shore up a £1.5bn hole in its banking business.
The society this week revealed it would be supporting the bank to the tune of £1bn, while the remaining £500m would be raised through the flotation of bonds as part of a ‘bail-in’.
Despite the £1bn injection, and a subsequent downgrading by Standard & Poor’s over fears it could “put pressure” on the group’s financial covenants, Sutherland said: “This plan means we do not have to make any further disposals of our core businesses.
“That’s one of the strengths of The Co-op Group - the diversity and reach into local communities that we can provide, and that remains.”
He also insisted the bond flotation was not a demutualisation of the society. “The bank has always been a plc and always had ownership structure of the mutual organisation around that,” he said. “We still hold the majority stake in our bank. That provides us with the opportunity to lead the bank in an ethical, community-based, responsible way.”